South African Financial Industry

Non-traditional participants continue to aggressively explore tax revenue opportunities offered by the southern African canting industry. The change magnitude grocery threats, luxuriouslyly rivalrous and continually changing environment has led to system& (2017) to refer to it as a market place with no boundaries. Figure 1 below, shows how the randomness African financial industry has progressed into the current state from just everyplace a decade ago.The environment is characterised by intense competition, globalisation, heightened node mobility and learn and deregulation (Bedeley, 2014 The Banking Association southward Africa, 2014). Advancements of digital solutions has been the key enabler for the non-traditional participants to re-shape their value marriage offer and endeavour into the banking market. This has resulted in empowered global guests (Somal, 2017). To combat the increasing threats and outperform the bracing entrants, traditional banks continue to seek out digital transformational strategies (Bedeley, 2014 Somal, 2017 Strategy&, 2017).To mho African traditional banks, the to a greater extent threatening challenge is client retention over attraction (Bedeley, 2014). They acquire vast customer entropy from the large market sh are evident in the second paragraph. This information continues to emerge at an alarming rate, due to annexd market shared, increased customer base and innovation (Bedeley, 2014).The South African Banks keep the chance to develop more customer centric strategies to respond to the wealth of selective information at hand. The key lies with translating this customer info into insight to enhance relationships with live customers. Referred to, in the modern age, as entropy analytic thinking. Data collection and analysis need to be a crucial part of business scheme (Somal, 2017). Data analysis depicts what has changed, and how to respond to it (McKinsey&Company, 2018 SAS, 2018).This implies the data captu re, storage, processing and analysing strategies must build full utilisation of the technologies visible(prenominal) to take up the challenges born from the data surge (Bedeley, 2014). Harvesting data and looking for patterns and anomalies to provide insight authorize to better business decision making and outcomes.This is not limited to, nevertheless includes, reduces operational costs, business risk analysis, reduced business uncertainty, consumer behavioural predictions, and sentinel smarter strategies to optimise current offerings or develop new ones (Bedeley, 2014 EY,2017 Stringfellow, 2014). Collecting and analysing customer data is not a new trend, the challenge is storing vast amounts of data, but, new technologies save relieved that liability (Forrester, 2018 TDWI, 2011). Organisations that adopt data analysis flog their competition by 5% in productivity, and 6% in gainfulness (EY, 2017 Stringfellow, 2014).According to EY (2017), by 2020, each human being pull up stakes buckle under 1.7 megabytes of new information per second. And, in the past two years, human beings have generated more information in the history of humankind. Effective internal and foreign knowledge management grants organisations the agility to detect opportunities and threats (e.g., reacting to new products or function of competitors) grasping possible opportunities (e.g., expanding into new markets), and staying afloat in a market whilst possessing competitive advantage (e.g., digital strategies to deliver efficient products or services) (Crte-Real, Oliveira & Ruivo, 2017 Bedeley, 2014 EY, 2017 McKinsey&Company, 2018).Understanding the South African MarketThis section aims to put into perspective the current market that South African banks serve. In 2017, 80.1% of South Africans lived in formal dwellings, 16.5% in loose dwellings, and 5.5% in traditional dwellings (StatsSA, 2017). According to a report by archetype Bank (as cited by BusinessTech, 2014), the poorest of the households in South Africa throwaway for 62.3%, with members who earn a combined income of R7, 167 per month.Middle class households, earning from R86, 001 to R1.48 million per annum, account for 26.4%. Affluent households account for 0.4%, with an income of more than R2.36 million per year. The bank notes, only 5.5% of households possibly have the dexterity to save each month Furthermore, the affluent households have a 65% saving capability each month of their income after-tax.The poor households contribute 11.2% to the countrys income, the essence class contribute a total of 64.6%, whilst the affluent contributes 22.6%. This report highlights the austereness of inequality in South Africa, whilst on the flip side highlights gain in the middle class (BusinessTech, 2016).Businesslive (2017) states, in the fourth quarter of 2016, thither were 24.31-million credit consumers in South Africa, which is 8 million more than the apply South African population Moreover, two out o f every v credit-active consumers have an impaired record, which is 40% of the 24.31-million credit-active consumers However, other debt including loan sharks debt were not included. In 2015, the World Bank report, declared South Africans as the worlds largest debtors (Businesslive, 2017).?Costumer propitiation Index for the South African Banking IndustryIn the fourth quarter of 2017, Consulta released a guest Satisfaction Index (SAcsi) for the South African banking industry. This satisfaction index is establish on brands exceeding or falling short of customer expectations, and the respondents fancy of the ideal product to achieve an overall result out of century (Consulta, 2017).The report reveals the degree of satisfaction of South Africans with their banks. Survey participants included 13,099 bank customers across various segments selected at randomly (Consulta, 2017). The table below shows the year-on-year SAcsi tally for the South African traditional banks from the year 20 17 till 2017.Absa shows a disintegration in the past three years, dropping from 74.8 in 2014 to 73.3 in 2017, resulting in obtaining the bottom position among the banks included in the benchmark. Standard bank antecedently held the last position, but, made a recovery with a substantial 3.3% increase in 2017 from the previous year.Nedbank suffered a 0.9% in 2017 from the previous year, 2016 77%, obtaining a 76.3% moving it to below the industry average of 77%. FNB obtained a 0.4% light in 2017 from the previous year, 2016 81.3%, but remains above the industry average. Capitec customers have remained the most satisfied for past five consecutive years. The 2017 Capitec score was 85.3%, 8.3% above the overall industry average.Gap Withing the South African Banking Industry Regarding Data AnalysisBanks are only using a portion of the customer data that is available to them to generate insight to optimise current offerings. The reasons for the low insight is silos and organisational str uctures, skills and talent gaps, data privacy, regulatory and legal framework or ethical issues and high costs associated to data analysis strategies (Somal, 2017).This prevents them from responding to changing customer needs hence, leads to mazed revenue opportunities. By prioritising data analysis to a key fraction to daily decision making, South African Banks can be furnish to integrate data from the different sources and develop solutions to better serve their customers, which go away deliver noteworthy benefits (Strategy, 2017).The outcome of this section suggests that with data analysis South African banks can provide business value by facilitating the scholarship of supply chain and marketing knowledge (Crte-Real et al., 2017). That translate to the veracious someone offered the right product on the right device at the right time (Bedeley, 2014). Since banks have so lots data available with the undeniable analysing tools, they have a 50% chance of retaining a customer that is virtually to leave (Somal, 2017).Section three forms the fundamentals of the investigation of this paper. The section begins with the use of insight harnessed from customer data analysis to enhance customer experience by reviewing closely related literature and then grants much needed detail on the data required for this resolution how it will be collected from diverse sources to build better models and gain more actionable insights improved to generate the right results and avoid making wrong conclusions and analysed for better decision making. The section concludes by presenting some key challenges and benefits of data analysis.